Opposition Brief — Central States, Southeast & Southwest Areas Pension Fund v. Crown Cork & Seal Co.

No. 92-1671

IN THI

Supreme Court of the United States

OcTOBER TERM, 1992

CENTRAL STATES, SOUTHEAST AND SOUTHWEST ARI

AS

PENSION FUND. ef @

CROWN CORK & SEAL COMPANY. IN¢

>

Respo PHT

(4

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

& RHOADS

1tic Tower

delphia, PA 19103

1d) 994-4000

Re

QUESTIONS PRESENTED

Under the Employee Retirement Income Security Act

(“ERISA”), 29 U.S.C. $$ 1001-1461, an employer (like

respondent) that contributed to a multi-employer plan

(like petitioner) is relieved of a statutory liability, called

“withdrawal liability,” if it (1) had a “binding agreement

to withdraw” from the plan before September 26, 1980,

and (2) effected a “complete withdrawal” from the plan

by December 31, 1980. The statute further provides that

a “complete withdrawal” takes place when the employer

either “(1) permanently ceases to have an obligation to

contribute under the plan, or (2) permanently ceases all

covered operations under the plan.” 29 U.S.C. $ 1383(a)

(emphasis added ).

The questions presented are:

(1) Whether, as both courts below and all but one

other federal court have held, there is a “complete with-

drawal” within the meaning of 29 U.S.C. § 1383(a)(2)

when an employer ceases its normal business operations

as part of a total shutdown, regardless of whether the

test for a complete withdrawal under subsection (a)(1)

is satisfied.

(2) Whether, as both courts below held on the specific

facts of this case, respondent had a “binding agreement

to withdraw” before September 26, 1980.

il

STATEMENT PURSUANT TO RULE 29.1

(he following information is provided pursuant to this

Courts Rule 29.1: Respondent Crown Cork & Seal Com-

pany, Inc. has eleven non-wholly-owned — subsidiaries:

Aluplata S.A.; Canmakers (Nigeria) Limited; Continental

Can Hong Kong; Crown Cork Company (Belgium) N.V.;

Crown Cork Company (Pvt) Limited; Crown Cork Com-

pany (Zambia) Limited; Crown Cork del Peru, S.A.;

Crown Cork & Seal (Thailand) Co., Ltd.; Emirates Can

Company, Ltd. (Dubai, UAE); The Crown Cork Com

pany (East Africa) Ltd.; and The Crown Cork & Seal

Company (Nigeria) Ltd.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED

STATEMENT PURSUANT TO RULE 29.1 il

TABLE OF AUTHORITIES : iV

STATEMENT OF THE CASE ee l

SUMMARY OF ARGUMENT eee sa ehaiiate 4

REASONS FOR DENYING THE WRIT 7

I. THERE IS NO CONFLICT IN DECI-

SIONS REQUIRING RESOLUTION BY THIS

COURT 7

Il. THIS ISSUE IS UNLIKELY TO ARISE FRE-

QUENTLY, AND SO THE PETITION DOES

NOT PRESENT AN IMPORTANT QUES-

TION FOR THIS COURT TO RESOLVE 11

Il. THE COURT OF APPEALS ADHERED TO

THIS COURT’S SETTLED PRINCIPLES OF

STATUTORY CONSTRUCTION IN INTER-

PRETING SECTION 1383 (a) 14

A. The Court of Appeals’ Use of Legislative

History Was Routine and Appropriate 14

B. The Court of Appeals Was Not Obligated to

Defer to an Amicus Brief Filed by the PBGC

in a Different Appeal Years Earlier 16

C. The Court of Appeals Correctly Interpreted

“Covered Operations” to Mean ‘Normal

Business Activity” ; 18

IV. THE COURT OF APPEALS CORRECTLY

APPLIED SECTION 558 OF DEFRA TO THE

SPECIFIC FACTS OF THIS CASE .... ices 20

CONCLUSION a aici taadsencbensinaisanhive 21

(iii)

iv

TABLE OF AUTHORITIES

Cases: Page

Barbizon Corp. Vv. ILGWU Nat’l Retirement Fund,

842 F.2d 627 (2d Cir. 1988), cert. dented, 488

U.S. 967 (1988) 18

Blum v. Stenson, 465 U.S. $86 (1984) 14

Bowen V. Georgetown Univ. Hosp., 488 U.S. 204

(1988) 16

Chevron U.S.A., Inc. Vv. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984) 17

Combs v. Leishman, 691 F. Supp. 424 (D.D.C.

1988) 1]

Connors V. Economy Bldq. Syste ms, Inc.., 651 F

Supp. 849 (D.D.C. 1986) 11

F.H. Cobb Co. v. New York State Teamsters Conf.

Pension and Retirement Fund, 584 F. Supp. 1181

(N.D.N.Y. 1984) 1]

Foremost-McKesson, Inc. Vv. Provident Securities

Co., 423 U.S. 232 (1976) ida 17

Garcia V. United States, 469 U.S. 70 (1984) 16, 19

ILGWU Nat'l Retirement Fund v. Weatherall

Fashions, Inc., No. 84-0772, 1986 WL 2757

(S.D.N.Y.) 1]

INS v. Cardoza-Fonseca, 480 U.S. 421 (1987) 17

Lona Island Oil Prods. Co. Vv. Local 552 Pension

Fund, 775 F.2d 24 (2d Cir. 1985) 3

Montclair v. Ramsdell, 107 U.S. (17 Otto) 147

(1883) 15

National Woodwork Mfrs. Assoc. Vv. NLRB. 386

U.S. 612 (1967) 15

Patterson Vv. Shumate, 112 S. Ct. 2242 (1992)

PBGC v. LTV Corn., 496 U.S. 633 (1990)

PBGC Vv. R.A. Gray & Co., 467 U.S. 717 (1984) 8, 13

Reves v. Ernst & Young, 113 8S. Ct. 1163 (1993) l

Shelter Framing Corp. V. PBGC, 705 F.2d 1502

(9th Cir. 1983) 13

Solar v. PBGC, 504 F. Supp. 1116 (S.D.N.Y.),

aff'd, 666 F.2d 28 (2d Cir. 1981) 17

Speckman V. Barford Chevrolet Co., 535 F. Supp

488 (E.D. Mo. 1982) 11

TABLE OF AUTHORITIES—Continued

Page

Textile Workers Pension Fund v. Standard Dye

& Finishing Co., 607 F. Supp. 570 (S.D.N.Y.

1985) 11

Trustees of Iron Workers Local 473 Pension Trust

Vv. Allied Prods. Corp., 872 F.2d 208 (7th Cir.),

cert. denied, 493 U.S. 847 (1989) passim

Watt v. Alaska, 451 U.S. 259 (1981) 15

Statutes and Rules:

Deficit Reduction Act of 1984 (“DEFRA’”’), § 558,

Pub. L. No. 98-369, 98 Stat. 494 3, 4, 6, 7, 20

Employee Retirement Income _ Security Act

(“ERISA”), 29 U.S.C. §§ 1001-1461 3

Multiemployer Pension Plan Amendments Act

(“MPPAA”):

29 U.S.C. § 1383 (a) passim

§ 1383 (e) 4

$ 1397 18

S 1461 (h) (2) 18

Fed. R. App. P. 29 . 16

Sup. Ct. R. 10.1 (a) 7

Other Authorities:

Baker, A Pratical Guide to Certiorari, 33 Cath.

U. L. Rev. 611 (1984) 10

R. Stern, E. Gressman & S. Shapiro, Supreme

Court Practice (6th ed. 1986) 2. ia

2A Singe ea Suthe rland Statutory Construction

(5th ed. 1992) 15

IN THE

Siprenw Court of the United States

OcTOBER TERM, 1992

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS

PENSION FUND, et al.,

¥ Petitioners,

CROWN CorRK & SEAL COMPANY, INC.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

BRIEF FOR RESPONDENT IN OPPOSITION

STATEMENT OF THE CASE

The full facts and procedural history of this case, as

well as the statutory scheme governing this case, are

accurately stated in the opinion of the Third Circuit.

Pet. App. 3a-9a. What follows is a summary of those

matters.

1. Facts. In July of 1980, Harold Abrams, Director

of Industrial Relations for respondent Crown Cork & Seal

Company (“Crown”), sent a letter to each of the fou:

unions that represented Crown’s employees at its St. Louis

plant to inform them that the company had made a fina!

decision to close the plant. Meetings were held on several

subsequent occasions to negotiate the effects of the plant

closing, but the company’s decision was not challenged.

Pet. App. 3a-4a.

Massive reductions in the work force at the St. Louts

plant followed. As a result of layoffs, terminations, and

transfers. “only 9 of Crown Cork’s 29 management em

ployees remained at the St. Louis Plant after September

26th; 44 of the 148 production and maintenance workers

remained; of 12 clerical workers, only 4 remained.” Pet.

App. 4a.

In addition, plant managers were notified by mailgram

on September 16, 1980, that the St. Louis plant would

close at the end of business on September 26, and that

all orders placed at the St. Louts plant should be switched

to another point of manufacturing before then. Pet. App.

4a. “Finish-up” work, consisting of assembling remain-

ing materials into cans, was performed up until October

10, 1980, and amounted to only 265 production line

hours, or only 5“ of the line-hours worked in April 1980.

Even this finish-up production work ceased completely

by October 10. Thereafter, “the only work performed

at the St. Louis plant consisted of tasks incidental to the

final closing of the plant; dismantling, maintenance, clean

up and disposal of equipment and property.” /d. By

December 31, 1980, “only three members of Local 688s

production and maintenance unit and only one member

of Local 688's clerical unit were still employed at the

St. Louis Plant, performing shut down work.” Pet. App.

Sa. The last of these employees was laid off on Novem-

ber 6, 1981. /d.

2

’n September

agreement with a real estate broker to sell the plant. Pet.

» he

3, 1980, Crown entered into a listing

1The parties had “stipulated that the sole activities after Octo-

ber 10, 1980 were tasks performed by just four employees incidental

to plant closing.” Pet. App. 17a n.10,

t

App. 4a. The plant ultimately was sold on June 3, 1982.

2. The siatutory scheme. Multiemployer pension plans

like petitioner are governed by the Employee Retirement

Income Security Act (“ERISA”), 29° U.S.C. §$ 100]

1461. On September 26, 1980, Congress enacted the Mul

tiemployer Pension Plan Amendments Act (“MPPAA” )

Pub. 1. No. 96-364, 94 Stat. 1208 (codified in relevant

part at 29 U.S.C. $$ 1381-1453). Under MPPAA, an

employer that withdraws from a multiemployer fund be

lis

bligated to pay a share of the plan’s unfunded

1 .

Ctiil

vested benefits. This obligation is called “withdrawal

lability.”

As originally enacted, MPPAA had retroactive effect.

Per LQ) Be heli Guaranty ( orp. NV. R. a Grra\ ra Co., 467

U.S. 717. 723 (1984). Although this Court held in the

Gray case that MPPAA’s retroactivity was constitutional

Congress nevertheless chanved its mind on that point and

subsequently amended MPPAA’s effective date as part of

the Deficit Reduction Act of 1984 (“DEFRA”), Pub. I

No. 98-369, 98 Stat. 494.

Section 558 of DEFRA provides, inter alia, that an

employer that had a “binding agreement to withdraw”

from a plan before September 26, 1980 would be exempt

|

from withdrawal liability. as lone as a “complete with

drawal” from the plan took place before December 31.

t !

L980. MPPAA defines a “complete withdrawal” from

multiemployer plan us occurring either when an employe

‘(1) permanently ceases to have an obligation to con-

tribute under the plan, or (2) permanently ceases all

2 As explained by the court below, “!t|he Senate Finance Com-

mittee found that the retroactive application of MPPAA had

induly burdensome effect on employers that withdrew between

April and September, 1980 and was unnecessary to preserve tne

financial integrity of multiempicyer plans.” Pet. App. 9a iti

Long Island Oil Prods. Co. V. Local 5532 Pension Fund, 775 F.2d

24. 27 (2a Gir, 1385

4

covered operations under the plan.” 29 U.S.C. § 1383(a).

Because DEFRA’s special, one-time-only exemption from

withdrawal liability was granted only to employers who

withdrew before December 31, 1980, it has no current

vitality, and it is doubtful that there are any more cases

pending under § 558

+

3. Opinions below Both courts below held that

Crown is not responsible for any withdrawal liability

based on its closing of the St. Louts piant. They held, on

the specific facts of this case, that Crown had a binding

agreement to withdraw from the plan on September 26,

1980; and that a complete withdrawal from the plan had

occurred before December 31, 1980. The rationale for

the latter part of the courts’ holdings was that no “opera

tions” took place at the St. Louis plant after October 10,

1980, when all production ceased. See Pet. App. 15a-18a.

Although some employees performed clean-up and dis

mantling work after December 31, 1980, for which Crown

continued to make contributions to the pension plan, that

work was merely incidental to the shutdown, and did not

constitute the normal operational or business activity of

the facility. Therefore, the Court of Appeals held that

this work did not constitute “operations” as that term 1s

used in the statute, and that a “complete withdrawal”

occurred before December 31, 1980, because Crown had

“cease[d] its normal business operations in_ preparation

for a shutdown.” Pet. App. 3a.

SUMMARY OF ARGUMENT

|. Petitioner claims that there is a conflict between the

holding of the Third Cireunit in t ise and that of the

Seventh Circuit in Pruste¢ , Oo] fron a orke rs / OCdi 473

Pension Trust Vv. Allied Products Corp., 872 F.2d 208

WS Cx

>. he cae ' > Y . >A ) rr "

(7th Cir.), ce . dente d, 493 U.S. 84 (1989). 7 he hold-

Similarly, the date of a “complete withdrawal” is defined as

“the date of the cessation of the obligation to contribute or the

cessation of covered operations.” 29 U.S.C, § 18&8383(e emphasis

added

2)

ings of the two cases, however, on their very different

facts. are not in conflict.

In this case, all production work had ceased prior to

the date of the claimed withdrawal. The Third Circuit

therefore focused on the correct definition of the term

“operations” in § 1383(a)(2), which says that a com-

plete withdrawal occurs when an employer “permanently

ceases ail covered operations.” The Third Circuit ulti-

mately held that when Crown’s production, which consti-

tuted its normal business activity, ended, its “‘operations”

ceased, and a complete withdrawal existed under the

Statute.

In Allied Products, on the other hand, actual produc

tion work continued beyond the date of the claimed

complete withdrawal. Therefore, the definition of “opera-

tions” was irrelevant to that decision since no matter what

“operations” might mean, it clearly included production

work. As a result, the parties and court focused on the

meaning of the word “all” in the phrase “permanently

ceases all covered operations,” rather than on the word

“operations.” The Seventn Circuit rejected the pension

fund’s argument and the holding of the district court, that

“all” could be read as “virtually all.” Hence, even though

the amount of work was de minimis, the Seventh Circuit

held that the statute’s requirement of a cessation of “all”

covered operations had to be read literally, and accord-

ingly no withdrawal had occurred

This Court reviews only direct, intolerable conflicts in

the holdings of the courts of appeals. There is no such

conflict here

;

Even if the approaches of the Third and Seventh

Circuits diverge, the practical consequences of this dif-

ference in opinion are likely to be insignificant at best.

First of all, it takes a very special confluence of several

result in this type of dispute over withdrawal

liability. The infrequency of that confluence is reflected

in the fact that in the thirteen years since MPPAA was

6

passed, there have been only two federal appellate court

cases (Allied Products and the instant case) and six dis

trict court cases dealing with the questions presented here.

In fact, in view of the improbability that any more cases

will be brought under § 558 of DEFRA, there will almost

certainly be even fewer cases in the future. The infre-

quency with which these issues have been litigated belies

petitioners dire predictions of great confusion if this

Court does not address these issues. Petitioner has ad-

vanced no reason why this Court must address these ques

tions at this juncture, when there is no square conflict,

rather than after their fuller consideration by other courts

of appeals if these questions ever should arise again.

3. Although framed by petitioner as an issue about the

Court of Appeals’ approach to statutory construction, at

bottom petitioner merely disagrees with the Third Cir-

cuit’s conclusion as to the meaning of § 1383(a)(2). In

fact, the decision of the Court of Appeals is supported

by all the other federal court decisions on the ques-

tion except for Allied Products, and was reached using

settled principles of statutory construction. The Third

Circuit’s consideration of legislative history was routine

and completely appropriate. The meaning of the statutory

term “operations” is by no means self-evident; and the fact

that all the other courts that have considered the question

(except for the Seventh Circuit) have adopted the same

interpretation of the term as the Third Circuit’s substan-

tially undtrmines petitioners argument that the term

unambiguously has a different meaning. Nor was there

anything exceptional about the Third Circuit’s failure to

address the views expressed by the Pension Benefit Guar

anty Corporation (“PBGC”) in an amicus brief filed

three years earlier in a different appeal, where the PBGC

neither filed an amicus brief in this appeal nor even in

formed the Court of Appeals that it still adhered to its

previous!v expressed views; where the PBGC had no rules

or regulations on the subject: and where the PBGC has

a history of taking inconsistent positions on this very

4. Both the District Court and the Court of Appeals

carefully considered the facts of this case and arrived

at the same conclusion: that respondent had a “binding

agreement to withdraw” from the plan before Septem-

ber 26. 1980. Petitioner has advanced no persuasive rea

son why this Court should review these facts and the con-

clusion reached, as to which the two lower courts were In

agreement. Moreover, this issue under § 558 of DEFRA

is unlikely to arise ever again, since that statute applied

by its terms only to employer withdrawals that took place

almost thirteen years ago.

REASONS FOR DENYING THE WRIT

I. THERE IS NO CONFLICT IN DECISIONS REQUIR-

ING RESOLUTION BY THIS COURT.

The petition is based primarily on a supposed conflict

between the decision of the Third Circuit in this case

and that of the Seventh Circuit in Trustees of Iron Work

ers Local 473 Pension Trust v. Allied Products Corp..,

872 F.2d 208 (7th Cir.), cert. denied, 493 U.S. 847

(1989). An examination of the facts and holdings in the

two cases. however, reveals that the Third Circuit ha

not “rendered a decision in conflict with the decision ol

another United States court of appeals on the same

matter.” Sup. Ct. R. 10.1(a) (emphasis added). Indeed,

the Third Circuit itself distinguished Allied Products on

its facts. See Pet. App. 17a n.10.

Under & 1383(a)(2), a complete withdrawal occurs

when an employer ceases “all covered operations.” * Be-

cause the appellate courts in Allied Products and this

case were presented with different facts and different

arguments concerning this provision, each court focused

on a different aspect’of this statutory test in its holding.

4The statute provides two alternative tests for effecting a “com-

plete withdrawal.” The first, in § 1388(a) (1), depends on a cessa

tion of the employer’s obligation to contribute to the plan. Since

contributions continued beyond the claimed withdrawal date in

both this case and Allied Products, no argument was made in either

case of a complete withdrawal under subsection (a) ( l

In Allied Products, the pension plan claimed that there

had been a “complete withdrawal” under § 1383(a)(2)

during the plan year ending June 30, 1983. Allied, the

employer, claimed that its “complete withdrawal” from

the plan did not occur until the next year, the plan year

ending June 30, 1984. The critical fact in Allied Products

was that regular production work, including manufactur-

ing and the processing of purchase orders, was performed

after the withdrawal date urged by the plan. As _ the

Seventh Circuit noted, “Allied still received, processed

and filled seven purchase orders during 1983.” 872 F.2d

at 209. The pension fund nevertheless argued that a com-

plete withdrawal had taken place on the ground that the

amount of work performed after its claimed withdrawa

date was de minimis. The district court had accepted this

argument and ruled that “it was sufficient if ‘virtually all

(as opposed to ‘all’) covered operations came to a halt in

order to trigger withdrawal liability.” 872 F.2d at 212

The Seventh Circuit disagreed, reasoning that “Con-

gress meant 100 percent when it said ‘all’” and therefore

that “there simply is no other way to remain faithful to

‘ Congress’ intent, as expressed by the statute’s clear and

unambiguous language, other than to hold that all (100

percent) of the covered operations must permanently

cease before finding an employer has completely with-

drawn from a multiemployer plan.” /d. at 213. The

Seventh Circuit held that a finding of a complete with

drawal during the plan year ending June 30, 1983, was

precluded by the facts, among others, that “Allied’s em-

ployees produced and shipped products to some of its

primary customers even after [that date]” and “Allied

also received several purchase orders after [that date].”

Id. at 214.

In the instant case, by contrast, no production work

at all was performed at the St. Louis plant beyond De

cember 31, 1980, the date-of the complete withdrawal

claimed by Crown. The Third Circuit explicitly pointed

9

out this critical factual distinction (see Pet. App. 17a

n.1Q) and, consistent with every other federal court deci-

sion on the question, held that under § 1383(a)(2) “an

employer has completely withdrawn when it ceases its

normal business operations in preparation for a_ shut-

down.” Pet. App. 3a.°

Thus, the Third Circuit in this case focused on the type

of work that would constitute ‘operations’; held that

such operations were the employer’s normal business oper-

ations; and therefore did not have to consider a de mini-

nis argument since no such operations took place after

Crown's claimed withdrawal date. The Seventh Circuit

in Allied Products, on the other hand, was _ presented

with and rejected a de minimis argument, and did not

have to define the scope of the term “operations,” since

it was clear that whatever “operations” might be, they

certainly existed beyond the claimed withdrawal date in

that case. albeit at reduced levels.

To be sure, the Seventh Circuit went beyond what was

necessary to its holding and mused in a brief, conclusory

footnote about the correct definition of “covered opera-

tions” within the meaning of 1383(a)(2). In that

dictum, it said that “ ‘covered operations’ refers to those

* Petitioner ignores this holding and instead attempts to focus

attention on other language in the Third Circuit’s opinion in order

to persuade this Court that there is a conflict in decisions. The

Third Circuit’s reference, however, to the occurrence of a with-

drawal upon a “substantial cessation of normal business operations”

quoted in Pet. at 10), came in the context of the court’s descrip-

tion of the statute’s legislative history. See Pet. App. 18a. It was

not the court’s holding. Indeed, only a few lines after the Third

Circuit’s description of the legislative history in the statement em-

phasized by petitioner, the Third Circuit reiterated its agreement

with the holdings of other federal courts consistent with its hold-

ing (as stated at Pet. App. 3a), that “the performance of non-

operational tasks incidental to a total closing of the facility does

not prevent the court’s finding that a complete withdrawal has

occurred.” Pet. App. 18a (emphasis added).

LQ

operations which are covered by the collective bargaining

agreement... for which the employer must contribute to

the pension plan.” 872 F.2d at 214 n.10. Therefore,

according to the Seventh Circuit, “the issue is whether

bargaining unit work is being performed for which con-

tributions are being made, not simply whether production

work ts being performed.” /d.

This statement by the Seventh Circuit is at variance

with the understanding of ‘“‘operations” adopted by the

Third Circuit in this case, as well as every other federal

court that has interpreted the term. The Seventh Circuit’s

Statement is dictum, however, since it was completely

unnecessary to the decision in that case."

This Court does not issue writs of certiorari to review

differences in the opinions of courts of appeals, where

those differences do not amount to square conflicts in the

lower courts’ decisions. See generally R. Stern, E. Gress-

man & S. Shapiro, Supreme Court Practice $ 4.3, at 196

97 (6th ed. 1986). “[T]here must be a real or ‘intolera-

ble’ conflict on the same matter of law or fact, not merely

an inconsistency in dicta or in the general principles

utilized.” /d. at 196 & n.22 (quoting Baker, A Practical

Guide to Certiorari, 33 Cath. U. L. Rev. 611, 617

(1984)). Because of the factual differences between the

Third and Seventh Circuit cases, the differing focuses of

their opinions, and the fact that the Seventh Circuit’s

interpretation of the phrase “covered operations” is

dictum, there is no such “intolerable” conflict here that

would call for review by this Court.

‘It also was a completely non-analytical statement. It was not

based on arguments of the parties, a consideration of legislative

history, or the obvious problem that the definition it proposes

makes the test for withdrawal set forth in § 1883(a) (2) redundant

with the test in § 1883(a) (1). See p. 19, infra.

l |

Il. THIS ISSUE IS UNLIKELY TO ARISE FRE-

QUENTLY, AND SO THE PETITION DOES NOT

PRESENT AN IMPORTANT QUESTION FOR THIS

COURT TO RESOLVE.

Even if there were a sufficiently direct conflict to war-

rant this Court’s attention, there are practical reasons

for not granting the writ of certiorari. Petitioner claims

that “|t!he problem created by this split is significant”

(Pet. at 10); that “[t]he circumstances leading to this

problem... are not rare” (Pet. at 11): and that “this

Courts guidance is urgently needed now.” Pet. at 30.

These statements are dramatic, but unfounded. In the

nearly thirteen years since MPPAA was passed, the ques-

tion of the meaning of the phrase “complete withdrawal’”’

under § 1383(a) apparently has arisen in only two appel-

late cases (this one and Allied Products), and six dis-

trict court cases.’ One appellate court case every SIX

or so years hardly presents the type of burning issue for

federal courts, employers, or pension plans, that petitioner

claims. And petitioner’s claims of importance and urgency

ire further belied by the apparent absence of any new

lawsuits concerning this provision in the last eight years.”

“See Speckman v. Barford Chevrolet ( '0., 585 F. Supp. 488 (E.D.

Mo. 1982); F.H. Cobb Co. v. New York State Teamsters Conf.

Pension and Retirement Fund, 584 F. Supp. 1181 (N.D.N.Y. 1984

Textile Workers Pension Fund v. Standard Dye & Finishing Co..

607 F. Supp. 570 (S.D.N.Y. 1985); ILGWU Nat’l Retire ment Fund

V. Weatherall Fashions, Inc., No. 84-0772. 1986 WL 2757 (S.D.

N.Y.) ; Connors v. Economy Bldg. Systems. Inc.. 651 F. Supp. 849

(D.D.C. 1986): Combs v. Leishman, 691 F. Supp. 424 (D.D.C.

1988

"Connors V. Economy Bldg. Systems, Inc.. supra, apparently the

most recently-filed lawsuit, was filed in 1985.

Moreover, of the eight cases that have dealt with the ‘‘com-

plete withdrawal” issue, four involved disputes over the date of a

complete withdrawal for purposes of claiming the total exemption

from liability granted by DEFRA in limited circumstances. In

that situation, employers had far more at stake and hence were

more likely to litigate than in ordinary withdrawal liability disputes,

which might or might not have involved differing amounts of with-

This Court generally does not grant certiorari when the

issue, even if important and the subject of a true conflict

of lower court decisions, is no longer a live one. See

Supreme Court Practice § 4.4, at 200.

It is not surprising that there have been so few cases

like this one. In order to have this particular dispute

over the meaning of “complete withdrawal” come to the

courts, a unique confluence of factors must be present.

First, the employer must cease its normal operations but

keep on some workers to perform tasks incidental to shut-

down, like clean-up and maintenance. Second, the em-

ployer must use employees covered by the collective bar-

gaining agreement, for whom contributions must be made,

to perform those tasks, rather than hiring an outside

cleaning or security service to perform them.” Third, the

union employees who remain on the payroll must do so

past the end of a plan year. Fourth, there must be a sig-

nificant difference in the amount of withdrawal liability

from one plan year to the next to trigger any real dispute.

Unless all of these factors are present, the issue of the

correct date of a complete withdrawal will not be litigated.

Thus, for the same reasons that the issue has come up

drawal liability from one plan year to another, but did not involve

total exemption from liability.

Since DEFRA cases thus were different from other withdrawal

cases and can no longer be brought, those cases should not even be

considered in assessing how frequently ordinary withdrawal lia-

bility cases have been brought and are likely to be brought in the

future. Excluding the DEFRA cases, only one appellate case,

Allied Products, and three district court cases have been brought

in the last thirteen years.

® Indeed, in light of the Seventh Circuit’s decision in Allied

Products, it is unlikely that there will be occasions in the future

in which this issue will come up, since employers who can benefit

financially from an earlier withdrawal date can simply use outside

workers rather than union employees for tasks incidental to shut-

down.

13

infrequently in the past, it is unlikely to arise with any

frequency in the future. In short, the issue is basically

academic and does not call for this Court’s review.

In any event, even if this issue were to arise again in

the future, it would be beneficial to this Court to have the

views of additional courts of appeals, both on the subject

of whether a de minimis rule is appropriate and on the

subject of the proper definition of “operations.” This is

especially true in view of the Seventh Circuit’s cursory

treatment of the “operations” issue and the fact that the

Third Circuit did not focus on the de minimis question.’

If these are the critical, recurring issues that petitioner

claims they are, this Court will have ample opportunity,

on a fuller and more developed body of precedent, to ad-

dress them. On the other hand, if, as history suggests,

such problems are unusual and isolated, they simply are

not worthy of review by this Court.”

‘© Moreover, this would be an inappropriate case in which to

consider the “complete withdrawal” issue in view of the facts that

the Third Circuit’s decision is in line with all the other federal

court decisions, whereas Allied Products is the aberrant decision,

and certiorari was denied in Allied Products.

''In PBGC v. Gray, supra, by contrast, the question of the

constitutionality of the retroactive application of MPPAA’s with-

drawal liability provisions was “the subject of extensive nation-

wide litigation.” Shelter Framing Corp. v. PBGC, 705 F.2d 1502,

1504 & n.2 (9th Cir. 1983) (partially listing cases). See also

467 U.S. at 728 n.7.

’

14

lil. THE COURT OF. APPEALS ADHERED TO THIS

COURT’S SETTLED PRINCIPLES OF STATUTORY

CONSTRUCTION IN INTERPRETING SECTION

383(a).

A. The Court of Appeals’ Use of Legislative History

Was Routine and Appropriate.

In its opinion below, the Court of Appeals announced

no new principles of statutory construction. Instead, it

engaged in a routine application of settled interpretive

rules. While petitioner attempts to generate controversy

over the application of the “plain meaning” rule, the Court

of Appeals’ use of legislative history was standard and

entirely appropriate.” In any event, there is no issue

here of sufficient importance to warrant review.

The Court of Appeals acted properly by examining the

legislative history in the face of ambiguous statutory lan

guage. The term “covered operations” in § 1383(a)(2)

is nowhere defined in ERISA. Nor is its meaning im-

mediately clear on its face. The Court of Appeals

accordingly held that the phrase is ambiguous. Pet. App

18a.'° It is, of course, one of the fundamental principles

of statutory interpretation that “[wJhere . . . a question

of federal law turns on a statute and the intention of

Congress, we look first to the statutory language and

then to the legislative history if the statutory language is

unclear.” Blum v. Stenson, 465 U.S. 886, 896 (1984)

12 Recent decisions by this Court have reinforced the long-settled

principle that examination of legislative history is an important

interpretive tool. See, e.g., Reves v. Ernst & Young, 113 S. Ct.

1163, 1170-72 (1993) (Court looks to legislative history when

interpreting RICO provision) ; PBGC v. LTV Corp., 496 U.S. 633,

647-50 (1990) (Court examines ERISA legislative history in order

to ascertain congressional intent).

13 Since every court that has addressed the meaning of “covered

operations” (except the Seventh Circuit) has agreed with the Third

Circuit’s construction, petitioner’s suggestion that the statute un-

ambiguously means something else is difficult to fathom.

15

(emphasis added); see also Patterson v. Shumate, 112

S. Ct. 2242, 2248 (1992) (endorsing resort to legislative

history to resolve statutory ambiguity) ."*

In addition to its finding of ambiguity, the court below

noted that petitioner’s interpretation of § 1383(a)(2)

would lead to a statutory redundancy. See Pet. App. 16a

n.9."" 't follows that the court below had a duty to

examine closely the intent of Congress so as to avoid

the redundancy, or at least to justify it. As this Court

has long recognized, a court engaged in statutory in-

terpretation must give effect, if possible, to every word

or clause. Montclair v. Ramsdell, 107 U.S. (17 Otto)

147, 152 (1883). Where the statute’s terms appear to

conflict or overlap, the court should explore the legisla-

tive history to ensure that the will of Congress is carried

out. See Watt v. Alaska, 451 U.S. 259, 266-67 (1981).

Petitioner’s further argument that the kind of legislative

history relied upon by the Third Circuit was inherently

unreliable, Pet. at 22-24, is completely baseless. The

court below relied principally on the reports of two con-

gressional commitees. the House Committee on Educa-

tion and Labor and the Senate Committee on Labor and

Human Resources. See Pet. App. 17a-18a. Contrary to

petitioner’s assertions, committee reports are the “most

persuasive indicia of congressional intent in enacting a

Statute.” 2A Singer, Sutherland Statutory Construction

: 48.06, at 332 (Sth ed. 1992). This Court has itself

recognized the reliability of committee reports, “‘which

‘represen[t] the considered and collective understanding

of those Congressmen involved in drafting and studying

1 This Court has noted that it is particularly important to con-

sider legislative history when interpreting labor statutes and

similar statutes that represent a careful balancing of powerful

policies. National Wood-

a

2, 619 (1967

competing interests and important nation

work Mfrs. Assoc. V. NLRR, 386 U.S. 61

15 Indeed, petitioner concedes that its reading of $ 1383(a) (2

may be redundant in light of § 1383(a)(1). Pet. at 20 n.16.

16

proposed legislation.’ Garcia v. United States, 469 U.S.

70, 76 (1984) (citations omitted). Far from committing

error, the Court of Appeals was completely justified in

examining these reports as part of its systematic inquiry

into the intent of Congress."

Bb. The Court of Appeals Was Not Obligated to Defer

to an Amicus Brief Filed by the PBGC in a Dif-

ferent Appeal Years Earlier.

Petitioner argues that this Court should review the

Court of Appeals’ departure from the views expressed

in an amicus brief filed by the PBGC three years ago,

when this case was before the Court of Appeals on a

different appeal. The Court of Appeals, however, broke

no new ground in not deferring to this brief.

First, the PBGC brief so heavily relied upon by peti-

tioner is not an agency rule or regulation, and does not

merit the deference due those formally approved state-

ments of position. See Bowen v. Georgetown Universit

Hospital, 488 U.S. 204, 212 (1988) (refusing to apply

principle of deference to “agency litigating positions that

are wholly unsupported by regulations, rulings, or ad-

ministrative practice”).

Second, the PBGC did not file the brief in connection

with this appeal. The brief was filed in 1989, and, as

petitioner concedes, was only “provided the panel in this

appeal through the joint appendix.” Pet. at 21 n.17. The

agency chose, for whatever reason, not to file a new brief

when this case again reached the Court of Appeals in

1992." Nor did the PBGC even reaffirm its old brief

16 Petitioner presents no evidence that any other congressional

committee had a different understanding of what constitutes

cessation of operations.

17 The Federal Rules of Appellate Procedure set out specific re-

quirements for filing amicus briefs. See Fed. R. App. P. 29. There-

fore, prospective amici certainly do not file a brief in one case and

expect to receive consideration, let alone deference, from all courts

hearing similar issues in the future,

through, for example, a letter to the court., Considering

that no amicus brief was actually filed here, and consider

ing the very real possibility that the views expressed in

the earlicr brief had grown stale, it is no wonder that the

Court of Appeals chose not to defer to them. Cf.

Foremost-McKesson, Inc. v. Provident Securities Co., 423

U.S. 232, 259 (1976) (refusing to defer to SEC amicus

brief and noting that brief was actually filed in different

case ).

Third, the position taken in the PBGC’s brief is incon-

sistent with a prior position taken by the agency. As

petitioner concedes, the PBGC once argued to another

court that under ERISA, an employer who has reduced

its participation in a fund to minimal levels may be

found to have withdrawn from the plan. Pet. at 24-25;

see Solar v. PBGC, 504 F. Supp. 1116, 1122-24

(S.D.N.Y.), aff'd, 666 F.2d 28 (2d Cir. 1981).'* This

Court has recognized that an inconsistent agency opinion

“is entitled to considerably less deference than a consist-

ently held agency view.” INS v. Cardoza-Fonseca, 480

U.S. 421, 446 n.30 (1987) (citations omitted ).

Finally, deference to even an established agency posi-

tion is appropriate only where the court, “employing tra-

ditional tools of statutory construction,” finds that Con-

gress did not speak to the disputed issue. Chevron U.S.A..

Inc. V. Natural Resources Defense Council, Inc., 467

US. $37, 843 1.9 (1984). Since the Court of Appeals

found that Congress intended the term “covered opera-

tions” to refer to normal business activity, the court cor-

18 Solar appears to have been the only case before the passage of

MPPAA that concerned withdrawal liability. Even though the issue

faced by the court and addressed by the PBGC in that case con-

cerned pre-MPPAA withdrawal liability, the nature of the basic

dispute was similar: the point at which an employer is deemed to

have withdrawn from a multiemployer fund. The district court in

Solar expressed concern that the PBGC’s abrupt turnaround was

a product of “new persennel” rather than considered statutory in-

terpretation. 504 F. Supp. at 1123.

| ; . ‘ , : = actin es” ] —

rectly chose not to consider the agencys o!d, contrary

position,

C. The Court of Appeals Correctly Interpreted “Cov-

ered Operations” to Mean “Normal Business Ac-

tivity.”

Although framed as an argument over methods of stat-

utory construction, at bottom petitioner merely disagrees

with the Court of Appeals’ conclusion as to the meaning

of §$ 1383(a)(2). The Court of Appeals held that the

term “covered operations” refers to the employer's “not

mal business operations.” Pet. App. 3a. Thus, where an

employer has ceased normal business activities but retains

a handful of employees for clean-up, maintenance, secu

rity, or the like, the employer has “completely withdrawn”

from the plan for purposes of § 1383(a)(2). This inter

pretation is the only construction that makes sense, effec-

tuates the intent of Congress, and renders no statutory

language superfluous.”

da rT . 1a We . oS “re ra nc”

Petitioner argues, however, that “covered operations

means “operations that give rise to the obligation to con

,

‘Indeed, the phrase “covered operations” is used elsewhere

ERISA, always to describe actual business activity. The phrase is

found, for example, in 29 U.S.C. § 1461(h) (2), which voids with

drawal liability for any grocery wholesaler who “ceased al] covered

operations” and “relocated its operations to a new facility” and ol

tained all necessary permits with respect to “construction of and

commencement of operations at the new facility” before September

26, 1980. In this provision, the term clearly refers to norma] bus

ness activities, moved from one location to another

The phrase is also used in 29 U.S.C. § 1397, which excuses em

ployers who withdraw from multiemployer plans after the enact

ment of MPPAA from withdrawal liability allocable to work per-

formed at facilities prior to September 26, 1980. At least one court

of appeals has noted that, under § 1397, an employer might be ex

empt from withdrawal liability for a facility shut down prior t

the enactment of MPPAA even if a few employees are retained

there to wind down the operation. Barbizon Corp. v. ILGWU Na-

tional Retirement Fund, 842 F.2d 627, 682 (2d Cir. 1988), cer?

den ed, 488 U.S. 967 1988

19

tribute to the plan.” Pet. at 17. This interpretation,

however, creates a redundancy, by obliterating the dis-

tinction between subsections 1383(a)(1) and (a)(2).

Complete withdrawal” would be defined only by the ces-

sation of an obligation to contribute, and the “covered

-

operations” language would effectively be read out of the

Statute.”

Petitioner s stt ined reading of & 1383(a) is at odds

yLi«

with the unmistakable intent of Congress. Sections

+

1383(a)(1) and (a)(2) are obviously not the same—they

were written as separate provisions so as to encompass

‘

diferent factual circumstances. See Garcia v. United

4 | T . s | eo ie. » 4 7 ] re . . y + .

States. 469 U.S. 70. 73 (1984) (where clauses of statute

be

are separated by conjunction “or,” these terms are to

given “separate meanings”). An employer has withdrawn

from a plan under MPPAA where it has either ceased to

make contributions (for example, after the expiration of a

ollective bargaining agreement), or where it has ceased

its normal business act'vity

Petitioner suggests (at 20 n.16) that § 1383(a 2) is a “clar

I ng red indancy Cr rts are ol igated, how ve! t VOId re-

dundancies where alternative, sens} le interpretations exist Peti-

{ nel 4 Suggests that 1383 2 I ont covel situation

where an employer “may” be under an “obligatio to contribute

should work ever resume at the facilit; l It is hard to

magine the tortured scenat that petitioner has in mind, and

t is virtually certain that Congress had 1 such scenario in mind

when it enacted 1383 with its two separate subsectio1

21 Petitioner points out that the term “covered work” is a term

of art in labor caselaw which describes work performed under

1] } . pememao — . > > > . " };

a collective bargaining agreement. Pet. at 19 But Congress did

‘ } >? , & 909 >) . » «é . .

not use the term “covered work I 1385 (a y I sea covered

Presumably, the drafters of MPPAA < uld have sed

yperations

the term of art noted by petitioner had they chosen to do so. The

Court of Appeals rrectiv interpreted the phrase that actually

appears in the statute.

20

IV. THE COURT OF APPEALS CORRECTLY APPLIED

SECTION 558 OF DEFRA TO THE SPECIFIC FACTS

OF THIS CASE.

Petitioner briefly argues that the Court of Appeals

incorrectly applied the part of §$ 558 of DEFRA that re-

quires an employer to have had a “binding agreement to

withdraw” before September 26, 1980, in order to be

exempt from withdrawal liability.

The Court of Appeals’ conclusion that §$ 558 was satis-

fied in this case was the result of a fact-specific inquiry

which does not warrant further review. The opinion be-

‘ow adequately supported the conclusion of both courts

below that Crown had a “binding agreement to withdraw”

by the critical date. After finding the operative phrase am

biguous, Pet. App. 12a, the Court of Appeals examined

expressions of congressional intent and concluded that

the phrase refers to employers who have “effectively and

irrevocably committed” to withdraw from a multiem

ployer plan. Pet. App. I3a-I4a. The opinion goes on

to describe carefully the various irrevocable commitments

made by Crown before September 26, 1980, toward clo-

sure of its St. Louis plant, and agreed with the Disirict

Court that these actions “bound” Crown to withdraw as

effectively as any contractual agreement. Pet. App. 14a.

There is nothing remarkable about the application of the

statute to the facts of this case by the courts below, and

certainly nothing that warrants review by this Court.

Moreover, the meaning of the operative language of

$558 of DEFRA almost certainly will not recur in any

cases in the future. That provision relieved employers

of withdrawal liability only if they took the specified ac-

tions by the statutory deadlines in: 1980. Any disputes

over what took place nearly 13 years ago would have to

have been litigated already, and will not recur. Thus,

the issue is not a live one and need not take up this

Court's time.

21

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

Respectfully submitted,

STEVEN B. FEIRSON

(Counsel of Record)

NANCY J. BREGSTEIN

THOMAS W. DOLGENOS

ANDREW J. MOTTES

DECHERT PRICE & RHOADS

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

(215) 994-4000

Counsel for Respondent

May 21, 1993